Commercial providers of TV, radio and online services frequently complain about excessive cross promotion by the BBC. Beyond the self-interest that the BBC�s commercial competitors should be expected to show, there are important policy questions on the link between promotional opportunities and the vitality of competition in these sectors. Recent comments by Ofcom�s Chief Executive indicate that these are now being considered.

Cross promotion often crops up in policy debates about the BBC. Even so, I don�t see much likelihood of external regulation being introduced to micro-manage the BBC�s cross promotional activity. It was therefore refreshing to see Stephen Carter recognise the relevance of a review of Ofcom�s own rules on cross promotion by commercial TV channels. In a recent speech he suggests scope for Ofcom to �level up� the ground between the BBC and commercial radio stations:

�Increasingly, radio companies are part of multi-media commercial players. If commercial TV wants to cross promote commercial radio that is part of the same group then that too can be building public value and we will review the rules that we inherited to see whether there are unnecessary obstacles to reasonable cross promotion between television and radio in the commercial sector�.

A review of the rules on cross promotion is welcome. But I�m a little concerned that Ofcom is still looking at this from the wrong angle.

The rules that Ofcom inherited are the ITC Rules on the Promotion of Programmes, Channels and Related Services on Commercial Television. These rules allow a commercial TV channel to use its airtime to promote certain services (e.g. a programme or another TV channel) without using up the limited airtime it is allowed for advertising third parties� products. However, and crucially, this opportunity for �promotional� airtime only applies where there is an ownership link between the TV channel and the promoted service. So Channel 4 can advertise E4 without eating into its limited advertising airtime, but any advert it shows for UKGold or XFM must come at the expense of an advert for the likes of Audi or KFC.

A continuation of rules based on this �ownership link� criterion is implied by Stephen Carter�s reference above to the promotion of commercial radio �that is part of the same group� as the TV channel. This condition seems unnecessarily discriminatory.

In particular, such an approach would seem to provide a commercial radio station that is affiliated with a TV channel with promotional opportunities that lie outside the TV channel�s advertising airtime limit, whilst preventing independent radio stations from striking deals with TV channels for corresponding airtime. This could harm competition. It could also create artificial incentives for mergers or joint ventures, as firms try to exploit the restriction on whose services a TV channel can promote.

Regulation seems better targeted at what services can be promoted outside the strict limits on advertising airtime, rather than whose services can be promoted.

Arguably changes are required to the treatment of advertising airtime in the Television Without Frontiers Directive. There is also scope for Ofcom, acting unilaterally, to modify its current rules on cross promotion in respect of the three commercial analogue channels which are currently regulated more strictly than that directive requires. For instance, it might be possible for Ofcom to grant ITV1, Channel 4 and Five a specified amount of airtime for the purposes of promoting say TV, radio and new media content, outside their current advertising allowance, which they could either use themselves or sell on to an appropriate third party. Such a change would address the discrimination concern above, and could reduce the risk that competition between commercial radio and the BBC is stifled.

In the spirit of cross promotion, click here for a brief note (2 pages, PDF) from August 2004 that argues the case for changes along these lines.